Home Finance How Does Open Loop Account-based Ticketing Work?

How Does Open Loop Account-based Ticketing Work?

by Ruben Trevor

With Open Loop payments in Account-Based Ticketing, the customer’s right to travel is managed by the back office of the platform. A customer’s account is identified by the ticket the customer holds as a token, or proof, of the right to travel.

Each time a customer taps their token around a system, the taps are collected and made available to a back-office system, which keeps track of each token’s use and calculates the cost of the product based on usage. As such, the back office is the ultimate authority as opposed to card-centric systems where the card is the authority.

How Does Account-based Ticketing Fulfill Its Function?

As part of this initiative, passengers are encouraged to use what they already have in their pockets to pay for their travel; whether a contactless bank card (cEMV), smartcard (NFC), phone, or smart wearable; and the payment is linked to the account in the back office.

For an Account-Based Ticketing system, the choice of the right tokens is crucial. There needs to be widespread availability of tokens across the entire transit network. Depending on the size of the agency’s rider base, smartphones, and contactless bank cards (cEMV) are particularly useful in this regard.

The fact that passengers already carry tokens in their pocket or wallet conserves the agency’s funds since they are not required to make plastic tokens (like smartcards). However, if an agency already has ID cards or smartcards in use, these could also make ideal tokens for users.

Following are the two steps that are recommended when enabling Account-Based Ticketing:

  1. Account-Based Ticketing: Contactless Payments (cEMV)

Account-Based Ticketing has shown to be effective using Contactless EMV (cEMV) cards, which are ‘open-loop tokens’ that provide security and convenience. Ticketing systems that work on an open-loop are those that utilize existing tokens and processes that are not exclusive to the transport system; as opposed to smartcards, which are typically closed-loop since they can only be used on the transit network.

As a safe token and an authenticatable payment method, contactless EMV cards offer many benefits to passengers. Therefore, people can tap and ride with an EMV card without creating an account or obtaining a ticket, allowing for easy travel. 

  1. Account-Based Ticketing: Stored Value Accounts

In addition to using a stored value account, account-based ticketing also involves using a secure token. Tokens with stored value can be dynamic barcodes generated from a smartcard, a private label cEMV card, or an ID card.

Tokens that have a stored value feature offer transit agencies many advantages, as they can easily implement and apply concessions which are particularly useful to user groups such as students. In addition, they can credit the account of the user. Besides using a stored value for account-based ticketing, riders can also exchange cash for credit and ride without the need for a bank account using account-based tickets. 

To Conclude

Riders only need to tap their secure tokens rather than buy a ticket or select a fare before traveling. The number and location of taps determine the fare that is charged after the passenger has travelled.

This method of granting people access to travel has given them a ticketless experience, revolutionizing the passenger experience.

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